with restrictions, not thought necessary either in France or the United States, should be so altered as to leave men free to form partnerships and joint-stock companies, either with liability limited to the capital subscribed, or with limited liability on the part of all the partners in a concern, except the acting managers; and further, to provide partners, at least in concerns of small magnitude, with some cheap and simple remedy against each other, instead of the present system, in which a partnership dispute compels all the parties to plunge head foremost into the unfathomable and hopeless gulf of the Court of Chancery.

Popular Belief respecting Profits.

The peculiar state of working-class opinion which renders this change advisable even on grounds of the most selfish policy, is worthy of notice. The germ of Socialism, ready at any moment to be quickened into most dangerous life, lies in the belief, wide spread and deeply-rooted amongst the operative class, that the capitalist obtains more than his just share of the produce of labour. In any intelligible sense of the word justice this is a mistake, a "popular delusion," which may yet furnish matter for a new and painful chapter in Dr. Mackay's valuable work. It is a delusion, because, if capital is to have any share at all, which will scarcely be denied, it could hardly have less than in cases of the largest investment it has at present. Whatever be the proper rate of profit in any case, the quantity must be in proportion to the quantity of the capital. There is no other way of measuring it. This, however, makes the share of the capitalist class in England seem to be very great, because the absolute quantity of capital that has been accumulated is enormous, but the rate of profit is lower than in any part of the world, and is constantly tending to a point at which no man would think it worth while to exercise the self-denial involved even in the easiest kind of saving. The most accurate index to the general rate of profit is the rate of interest on

Profits in

Government securities, which is now three per cent. business on large capitals may be four, five, seven, or ten per cent., according to trouble and risk, and are kept at the lowest point by the most intense competition; but three per cent. is all that can be had for the mere use of capital where the security is perfect, and where the return is dropped like a ripe fruit into the mouth of the capitalist as he sits in his easy chair. Now there is not a workman in England who, when he has made a little capital by his own savings, does not think three per cent. a paltry and beggarly return for it. It is as clear to him as daylight, that the return is too small, because he compares it with the gross returns of the great millowner, whose accumulated stock enables him to vie with the peerage in the splendour of his establishment, forgetting the great hazards to which that stock is continually exposed, from the storms of the ocean, from the destruction of markets by political revolutions, and still more from the sudden and startling variations in the produce of the earth which are brought about by mysterious natural causes. When these risks and drawbacks are duly allowed for, it is certain that the average return to capital in England is kept down to its lowest point, by a competition far more intense and unsleeping than that which amongst the labouring class depresses wages. It is certain, too, that in proportion to the greatness of the capital is the smallness of the rate of profit, and the whole tendency of our monetary system is to make the proportionate value of capital sink more rapidly than the value of labour. The power of those who possess capital may be a growing power, but it does not grow at all in proportion to the growth of the capital itself.

The operative, however, is apt to believe that the division of the produce between himself and the owner of those immensely expensive tools which enable the production to take place, is never exactly what it should be. He thinks that he, a child of Adam like the other, is, according to the French term, exploité, that is to say, habitually worked, or used up, for the profit of his employer, and during those slow monotonous hours of toil, that

thought not seldom stirs within him a silent yet grim resentment. It is this which gives almost a savage virulence to the feelings called forth by strikes. And it is truly wonderful, that observing men are not often startled and dismayed by the indications of social danger which every one of those transactions furnishes. The broad fact which every such contest makes apparent is this, that in the region of most active industry society is split into two hostile camps, and that the only tranquillity which subsists between them is that of a convenient but hollow truce, which may be broken at an instant's warning. Yet, even in its foreign relations, it is true of the vast industrial system of which this is the condition, that it stands, as Burke said of the Constitution, "on a nice equipoise, with steep precipices and deep waters upon all sides of it." Never was policy more clear than that of removing from what is so situated the elements of internal disorder.

Workmen may become Capitalists.

The main source of the danger lies in the fact that the workman does not understand the position of the capitalist. The remedy is, to put him in the way of learning it by practical experience. A simplification of the law of partnership could not fail to have this effect, for the disposition of the working classes to invest their own savings in joint-stock industrial enterprises is manifesting itself with increased strength from day to day. In many departments of industry, of course, their small capitals would be of no use, and in many, the vigilant despotism of a single owner or an absolute manager is indispensable to success; but what is wanted is, that men shall be free, and shall find legal facilities for making every experiment which shall seem to themselves to promise profit. They are anxious to do this. They ought to have leave to do it. They will no doubt be often deceived. They will make mistakes, and will suffer losses. With the ignorance, the rashness, and the gullibility which is found in men, there cannot but be victims. But what

great good can be bought without a price? The march of society to its most signal triumphs is always over the wounded and the slain. Our business is to go on with all humanity and tenderness, but still to go on. There is sacrifice in advancing, but there is neither safety nor honour in retreat.

Working men, once enabled to act together as the owners of a joint capital, will soon find their whole view of the relations between capital and labour undergo a radical alteration. They will learn what anxiety and toil it costs to hold even a small concern together in tolerable order; what amazing difficulties there are in the way of organizing, by voluntary consent, that industrial discipline which capital now enforces; and what losses, what cruel disappointments in markets, what trembling uncertainties, may carry off the mind of the owner of capital in painful abstraction when the children are on the knee at the fireside, or may whiten the hair on a sleepless pillow. Operatives who go through this experience will find not only their thoughts, but their sympathies enlarged. They will grow both in wisdom and in charity.

Partnership an Instrument of Social Improvement.

Upon such narrow grounds of policy, then, as might be suggested by a mere zeal for the safety of property, facilities should be given for partnership amongst working men; but my advocacy of them does not rest upon these grounds. The joint-stock principle appears to me to be an instrument of immense latent capacities for elevating the condition of the whole labouring class to a higher grade, both of material comfort and of intellectual and moral cultivation, than they have yet attained. It is, therefore, their clear and undoubted right to have the use of this instrument, and those who would withhold it from them must do so at their peril. Already they show that they are not incapable of wielding it with effect. Joint

stock enterprises have been set on foot by working men, and in the teeth of all legal obstructions have been carried to a successful issue. Many have failed, but some have completely succeeded, and, in such a case, one success outweighs a hundred failures. Every failure is a warning, every success is an example. The failure in each case serves, as it were, to mark some new rock in the chart of the industrial navigation, but the single success is the discovery of a deep and spacious harbour in which whole navies may ride in safety.

The form in which the principle of working-class partnership has been most successful, is that of co-operative stores. In some of the large manufacturing towns, as at Rochdale and Leeds, stores for the distribution of various articles of consumption, and mills for grinding corn, have been set up, and are now in operation. The shareholders sought to obtain two things: first, to secure articles perfectly free from adulteration; and, secondly, to obtain them as nearly as possible at wholesale prices. Their belief is, that in both ways they have succeeded. To me it would seem that the gain in either way can be at best but slight, if the joint-stock plan be compared with that of obtaining the articles from an equally large store of a private capitalist, and whatever the gain may be, of course it involves the risk of mismanagement, and of loss to the capital invested; but if the parties concerned believe that there is a gain, and that the gain is worth the risk, and if they go on steadily with this scheme of co-operative distribution, acquiring from day to day new powers of industrial combination, learning to look at many questions from a point of view at which they never stood before, and constantly growing in habits of mutual trust, then the worth of the whole process, considered merely as one of practical education, is inestimable, and it is quite certain that by means of it they are qualifying themselves for safely undertaking, at a future period, schemes of wider scope and greater difficulty. But the co-operative store is not the only form in which this kind of partnership has been successfully carried